VBS crisis threatens liquidity of West Rand District Municipality

15 March 2018

Gauteng MEC for Finance, Barbara Creecy must immediately take steps to ensure the solvency of the West Rand District municipality (WRDM) following the collapse of VBS Bank.

The municipality has an investment with the bank to the tune of R81 million and an over-night facility of R50 million, of which R24.6 million has already been accessed.

VBS was placed under administration following its inability to pay out funds to an undisclosed municipality.

Given the major service delivery challenges facing the WRDM, it is vital that the funds it has invested in VBS be withdrawn and invested with another financial institution to ensure that the municipality can carry out its mandate.

The DA has already expressed its concern to the WRDM because the loss of these funds would essentially bankrupt the municipality.

Emfuleni and Merafong municipalities are already suffering from poor financial planning. MEC Creecy cannot sit idle and allow another municipality in Gauteng to succumb to financial ruin.

The DA will write to MEC Creecy to ascertain how this money is to be recovered from VBS and what contingency plans have been put in place to assist the municipality if the bank declares insolvency.

Issued by Adriana Randall, DA Gauteng Shadow MEC for Finance, 15 March 2018